Temptation Foods Ltd. के अकाउंट के लिये नोट

Mar 31, 2010

1. Contingent Liabilities

a) Claims against the Company not acknowledged as debts: Rs. 1,073,042/-(Previous Year: Rs. 6,851,986/-).

b) Counter guarantees given to a bank on account of guarantees given by them to Value Added Tax authorities: Rs. 2,884,453/- (Previous Year Rs. 2,804,500/-).

c) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 60,000,000/- (Previous Year Rs. NIL).

2. Capital Reserve

Capital Reserve includes Rs. 146,000,000/ (Previous Year Rs. 962,500) being the amount of warrant application money forfeited on 7,300,000 (Previous Year 275,000) warrants in respect of which the warrant holder did not exercise their conversion option.

3. Convertible Warrants

In the previous year, the company had allotted 7,300,000 convertible warrants during the year, including 300,000 warrants allotted to the Directors of the company, on 11th August, 2008. Each warrant was convertible into one equity share of the company, fully paid up, at a conversion price of Rs. 200 per share. The option was required to be exercised within the stipulated period from the date of allotment. The warrant holders had paid 10% of the conversion price at the time of allotment, which stands forfeited and credited to the Capital Reserves Account, since the options were not exercised within the stipulated period.

Certain warrant holders who were allotted 7,300,000 warrants (Previous year 900,000 warrants in November, 2006), did not exercise their rights to convert the warrants into shares in respect of 7,300,000 outstanding warrants (Previous Year 275,000 outstanding warrants), and on the expiry of the conversion period, the application money of Rs. 146,000,000/- (Previous Year Rs. 962,500) paid in respect of the outstanding warrants were forfeited to the Company and credited to the Capital Reserve Account.

4. Formalities for updating information relating to increase in Authorised Share Capital of the Company on the portal of Ministry of Corporate Affairs are in progress.

5. Revaluation

The company had revalued as at 31st March, 2007, leasehold land, building and plant and machinery assets situated at Jejuri plant based on the report by an independent chartered valuer. The valuation resulted in net increase in the value of the said assets by Rs. 81,082,224/- and corresponding increase in revaluation reserve by like amount.

During the year, the company carried out a second revaluation as at 22nd July, 2009 of plant and machineries located at Jejuri and Sonepat plants by an independent chartered valuer. The valuation resulted in a net increase in the value of the said assets by Rs. 126,871,462/- and corresponding increase in revaluation reserve by like amount.

6. General Reserves:

During the year, Company transferred Rs. 2,613,173/- to General Reserves, the amount of Special Capital Incentive Rs. 2,500,000/- and Subsidy from Government Rs. 113,173/-, since the said reserves became free on fulflling the conditions relating thereto.

7. Secured Loans:

Pre/Post Shipment Credit Facility and the Working Capital Demand Loan are secured by charge on the current assets of the company, both present and future, charge on the immovable and movable assets, present and future, and Corporate Guarantee by the Promoter Company (Venture Business Advisors Pvt. Ltd.).

Working Capital Loan from Punjab National Bank is secured by first pari passu charge on current assets, present and future, charge on all movable fixed assets both present and future and Corporate Guarantee given by the Promoter.

Cash Credit facility from United Bank of India is secured by first charge on current assets, both present and future, charge on plant & machineries, both present and future and Corporate Guarantee given by the Promoter.

Overdraft facility from Yes Bank is secured by hypothecation of the Fixed Deposit Receipt.

Factoring Facility with SBI Global Factors Ltd. is secured by charge on fixed Assets, receivables, charge on immovable properties, pledge of the shares of the Company held by the Promoter and Corporate Guarantee given by the Promoter.

Margin Funding Facilities are secured by the pledge of the shares of the company which have been acquired by utilising the facilities and, in certain cases, by the pledge of the shares of the Company held by the Promoter.

Vehicle loans from Tata Capital Ltd. and Reliance Capital Ltd. are secured by hypothecation of the specific vehicles.

8. Segment Reporting:

The disclosure requirement in respect of Accounting Standard 17 on "Segment Reporting" is as under:

a) Primary Segment

The company is a single segment company dealing in fresh and frozen foods in accordance with the criteria for identification of reportable segment specified in the said standard.

9. Employee Benefits:

The disclosures pursuant to Accounting Standard (AS) 15 (Revised) on "Employee Benefits" are as follows:

a) Defined Contribution Plan

Contribution to Defined Contribution Plan recognised as an expense and included in "Personnel Cost" – Schedule 13 in the Proft and Loss Account is as under:

- Employers contribution to Provident Fund and Other Funds– Rs. 1,345,629/- (Previous year: Rs. 1,666,654/-).

c) The company has an Employees Group Gratuity Scheme with the Life Insurance Corporation of India (LIC), to fund the defined benefit plan for the qualified employees. The Scheme provides for lump sum payment to employees on retirement, death while in employment or termination of employment of an amount equivalent to 15 days salary for every completed year of service or part thereof in excess of six months, provided the employee has completed fve years in service.

The said policy has not been renewed by the company. In view of the above, LIC has not given the detailed disclosure required under AS-15. The disclosure in the notes to accounts is based on the renewal notice received from LIC which in the opinion of the company satisfies the requirements relating to disclosure of gratuity liability as per AS-15. Since in the opinion of the company the opening provision in the books is in excess of the accrued gratuity liability at the year end as disclosed in the renewal notice of LIC, the difference has been written back as income.

10. Extraordinary Item

The Company incurred loss of Rs. 119,589,019/- during the year (Previous Year: 25,191,443/-) on sales of shares of Kohinoor Foods Limited, which has been disclosed as an Extraordinary Item.

11. Related Party Disclosures:

The disclosure requirements in respect of Accounting Standard 18 on "Related Party Disclosures" are as under:

a) Relationships :

i) For the Financial year 2009-10

a) Company under same Management Venture Business Advisors Pvt. Ltd.

Delika Foods Pvt. Ltd.

b) Wholly Owned Subsidiary Company Temptation Foods International Ltd.,

British Virgin Islands

c) Subsidiary Company Temptation Foods FZE, Sharjah, UAE.

d) Key Management Personnel Mr. Vinit Kumar, CMD



ii) For the Financial year 2008-09

a) Company under the same management Venture Business Advisors Pvt. Ltd.

b) Wholly owned Subsidiary Company Temptation Foods International

Limited, British Virgin Islands.

c) Key Management Personnel Mr.Vinit Kumar, CMD

12. Deferred Taxation:

a) In compliance with the Accounting Standard 22 on "Accounting for Taxes on Income", the Company has recognized deferred tax on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

13. Impairment of Assets

As required by Accounting Standard 28 on Impairment of Assets, the Company has reviewed the potential generation of economic benefts from fixed assets and concluded that the fixed assets employed in the business will generate adequate economic returns over their useful lives. Consequently, no provision for impairment loss is required.

14. Regrouping / Reclassification:

Figures for the previous year have been regrouped / reclassified wherever necessary to make them comparable with those of the present year.